The Government today announced that support measures under the SME Financing Guarantee Scheme (SFGS), the 100% Personal Loan Guarantee Scheme (PLGS) and the Pre-approved Principal Payment Holiday Scheme will be extended.

For the SFGS, the maximum duration of principal moratorium for its 80% and 90% guarantee products as well as the Special 100% Loan Guarantee will be extended from 18 months to 24 months.

The application period for principal moratorium will also be extended till the end of June next year.

Financial Secretary Paul Chan noted that although the Hong Kong economy is stabilising, the operating environment of some enterprises remains challenging and the economic outlook is clouded by the global pandemic.

"The further extension of principal moratorium under the SFGS will allow enterprises to defer principal repayments for a maximum of two years. This should effectively alleviate their cash flow burden."

Meanwhile, the application period of the PLGS and the Pre-approved Principal Payment Holiday Scheme will both be extended to the end of April next year.

Mr Chan said: "By extending the application period of the PLGS, we can provide support to more unemployed people who are in need, helping them tide over the interim difficulty."

He was also pleased that the banking sector has joined hands with the Government to support corporates in need by responding positively to the commercial sectors' request to extend the Pre-approved Principal Payment Holiday Scheme again.

Meanwhile, the Monetary Authority and the Banking Sector SME Lending Coordination Mechanism, which are responsible for the Pre-approved Principal Payment Holiday Scheme, said they noticed that corporates requiring loan extension under the scheme have dropped from 16% to 2.7% of all eligible corporates.

On the other hand, with the cumulative principal repayment holiday for borrowers under the scheme reaching two years, the challenge for the banks' risk management is increasing.

The authority and the mechanism therefore considered it necessary to start exploring plans for discontinuing the scheme and will engage the banking industry to discuss the appropriate exit arrangements in the coming months.